EMV Compliance in the U.S.

In 1994, Europay, Mastercard®, and Visa® came together to develop an Integrated Circuit Card Specification which would ensure global interoperability of smart card-based payments. What emerged was the EMV standard, which has rapidly become the global standard for smart card-based payments. By 2011, 75.9% of terminals and 42.4% of cards globally were EMV-compliant. With its enhanced security features, EMV has also had documented success in reducing fraud in regions where it has been adopted. The U.S. payments industry, however, continues to rely on magnetic stripe cards. These cards are more vulnerable to fraud than EMV-compliant cards. As a result, U.S. travelers are increasingly finding that their magnetic stripe cards are not accepted in EMV-compliant regions. In this whitepaper, we analyze the impact of non-compliance with EMV standards on the U.S. payments industry and also look at the objections which have been blocking migration to EMV. We also analyze the benefits which the U.S. payments industry can gain if it chooses to adopt EMV standards. Finally, we propose a set of considerations relevant to different payments participants—issuers, acquirers, and merchants—which should be considered to ensure a smooth and successful migration to EMV standards in the U.S.